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Segment reporting
 12 Months Ended
Dec. 31, 2024
Segment reporting [Abstract]  
Segment reporting
7. Segment reporting


We apply the provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 280, “Segment Reporting.” We view our operations and manage our business as one segment: the design, development and marketing of software-driven technology and printing solutions and the sale of printer and terminal related software, services, supplies and spare parts. Factors used to identify TransAct’s single operating segment include the similar design, construction and functionality of our products and services, the combined research & development team that supports the entire company, a combined assembly, production and supply chain logistics process used to construct our products and services and a similar class of customers within our core markets (distributors, resellers, original equipment manufacturers (“OEMs”) and end users). Other factors used to identify TransAct’s single operating segment include the organizational structure of the Company and the financial information available for evaluation by the chief operating decision-maker (“CODM”) in making decisions about how to allocate resources and assess performance. The Company’s chief operating decision makers, who are the Company’s chief executive officer and the Company’s chief financial officer, utilize a consolidated approach to assess the performance of and allocate resources to the business.


We generally use measures of sales, gross margin percentage, net income, earnings before interest, taxes, depreciation and amortization (“EBITDA”) and adjusted EBITDA to make operational and strategic decisions. These financial measures are compared to budgeted and forecasted amounts by the CODMs on a regular basis to measure our progress towards our strategic plans, pursue product enhancements, conduct research and development initiatives and make any other necessary overall strategic changes to the business.


The following table provides the operating financial results of our segment:


   
December 31,
  
(In thousands)
  
2024
    
2023
  
Revenues
  
$
43,384
    
$
72,631
  
                 
Cost of materials sold
    
15,268
      
25,990
  
Compensation costs
    
18,323
      
20,004
  
Professional services
    
3,493
      
4,965
  
Occupancy costs
    
1,477
      
1,485
  
Marketing expenses
    
1,109
      
1,715
  
IT expenses
    
1,255
      
1,203
  
Severance expense
    
75
      
1,785
  
Depreciation and amortization
    
1,037
      
1,489
  
Other segment expenses(1)
    
4,973
      
8,289
  
     
(3,626
)
    
5,706
  
                 
Interest income
    
469
      
55
  
Interest expense
    
(322
)
    
(310
)
Other (expense) income
    
(89
)
    
452
  
Income tax benefit (expense)
    
(6,295
)
    
(1,155
)
Net (loss) income
  
$
(9,863
)
  
$
4,748
  



(1)
Other Segment expenses included in Segment net income primarily include other cost of goods sold, other administrative costs and engineering costs.

A reconciliation of net (loss) income to EBITDA and adjusted EBITDA follows:


   
Years Ended December 31,
  
(In thousands)
  
2024
    
2023
  
Net (loss) income
  
$
(9,863
)
  
$
4,748
  
Interest (income) expense, net
    
(147
)
    
255
  
Income tax expense
    
6,295
      
1,155
  
Depreciation and amortization
    
1,037
      
1,489
  
EBITDA
    
(2,678
)
    
7,647
  
                 
Share-based compensation
    
1,157
      
860
  
                 
Adjusted EBITDA(1)
  
$
(1,521
)
  
$
8,507
  



(1)
Adjusted EBITDA in 2023 includes a $1.5 million severance charge related to the resignation of the Company’s former Chief Executive Officer.


Please see Note 14 for net sales and long-lived assets by geographic area.